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Photronics, Inc.$9.75($.20)(2.01%)

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 Photronics Reports Second Quarter Fiscal 2020 Results
   Wednesday, May 27, 2020 6:00:00 AM ET
  • Second quarter 2020 revenue was $142.8 million, down 11% sequentially and up 9% year-over-year
  • Net income attributable to Photronics, Inc. shareholders was $6.3 million, or $0.10 per diluted share
  • Cash provided by operating activities was $30.5 million, resulting in a cash balance of $237.8 million
  • Third quarter 2020 guidance: revenue between $145 and $155 million with diluted EPS between $0.11 and $0.17

BROOKFIELD, Conn., May 27, 2020 (GLOBE NEWSWIRE) -- Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its fiscal 2020 second quarter ended May 3, 2020.

Second quarter revenue was $142.8 million, 11% lower than the previous quarter and 9% better than the same quarter last year. Integrated circuit (IC) revenue was $96.8 million, down 9% sequentially and down 2% compared with the second quarter of last year. Flat panel display (FPD) revenue was $45.9 million, down 13% compared with last quarter and up 39% compared with the same period last year.

Net income attributable to Photronics, Inc. shareholders was $6.3 million ($0.10 per diluted share), compared with $10.3 million ($0.16 per diluted share) for the first quarter of 2020 and $8.5 million ($0.13 per diluted share) for the second quarter of 2019.

"Our entire organization performed well, working hard to meet customer needs during an unprecedented period characterized by supply chain challenges and growing uncertainty,” said Peter Kirlin, chief executive officer. “Our business was soft in China, due primarily to shelter-in-place directives that caused some customers to push out orders, particularly for IC foundries and high-end display panel production. As we ended the quarter, most of these directives were lifted and demand began strengthening. Our low-cost focus and strong balance sheet are helping us to navigate the uncertainty. We remain focused on compelling long-term growth opportunities and are committed to investing to expand market share and maintain technology leadership, primarily in mobile display applications, which we anticipate will continue to grow.”

Third Quarter 2020 Guidance

For the third quarter of 2020, Photronics expects revenue to be between $145 million and $155 million, and net income attributable to Photronics, Inc. shareholders to be between $0.11 and $0.17 per diluted share.

Conference Call

A conference call to discuss these results is scheduled for 8:30 a.m. Eastern time on Wednesday, May 27, 2020. The call can be accessed by logging onto Photronics' website at . The live dial-in number is (877) 377-7095 or (408) 774-4601 outside of the United States and Canada. The call will be archived on Photronics’ website.

About Photronics

Photronics is a leading worldwide manufacturer of integrated circuit (IC) and flat panel display (FPD) photomasks . High precision quartz plates that contain microscopic images of electronic circuits, photomasks are a key element in the IC and FPD manufacturing process. Founded in 1969, Photronics has been a trusted photomask supplier for 50 years. As of October 31, 2019, the company had 1,775 employees. The company has 11 strategically located manufacturing facilities in Asia, Europe, and North America. Additional information on the company can be accessed at .

Forward-Looking Statements

Certain statements in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements made by or on behalf of the company and its subsidiaries. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Photronics to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “may increase,” “may fluctuate,” “will,” “should,” “would,” “may” and “could” or similar words or expressions are generally forward-looking in nature and not historical facts. Any statements that refer to outlook, expectations or other characterizations of future events, circumstances or results are also forward-looking statements. Important risks, assumptions and other important factors that could cause future results to differ materially from those expressed in the forward-looking statements are specified in Photronics’ Annual and Quarterly filings with the Securities and Exchange Commission under headings such as “Forward-Looking Statements”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other filings and furnishings made by Photronics with the Securities and Exchange Commission from time to time. These risks and uncertainties include, but are not limited to, the current pandemic and future recurrences and other developments with respect thereto, governmental responses to the pandemic and related matters, changes in end markets resulting therefrom, changes in investment, tax, trade, exchange and other laws and regulations, as well as economic, competitive, legal, governmental, political, monetary and fiscal policy, and technological factors and decisions we may make in the future regarding our business, capital structure and other matters. Photronics undertakes no obligation to release publicly any revisions to any forward-looking statements or, except as required to be disclosed in filings or furnishings with the Securities and Exchange Commission, to report events or to report the occurrence of unanticipated events. There is no assurance that Photronics’ expectations will be realized.

Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
 Three Months Ended Six Months Ended
 May 3, February 2, April 28, May 3, April 28,
 2020 2019 2020 2019
Revenue$142,774  $159,736  $131,580  $302,510  $256,291 
Cost of goods sold 112,341   125,134   105,570   237,475   204,179 
Gross profit 30,433   34,602   26,010   65,035   52,112 
Operating Expenses:         
Selling, general and administrative 13,267   14,219   13,269   27,486   27,061 
Research and development 4,462   4,080   3,542   8,541   7,805 
Total Operating Expenses 17,729   18,299   16,811   36,027   34,866 
Operating income 12,704   16,303   9,199   29,008   17,246 
Other income (expense), net (951)  3,697   3,931   2,745   5,039 
Income before income taxes 11,753   20,000   13,130   31,753   22,285 
Income tax provision 3,781   9,072   3,278   12,853   4,665 
Net income 7,972   10,928   9,852   18,900   17,620 
Net income attributable to noncontrolling interests 1,688   628   1,373   2,316   3,874 
Net income attributable to Photronics, Inc. shareholders$6,284  $10,300  $8,479  $16,584  $13,746 
Earnings per share:         
Basic$0.10  $0.16  $0.13  $0.25  $0.21 
Diluted$0.10  $0.16  $0.13  $0.25  $0.20 
Weighted-average number of common shares outstanding:         
Basic 64,937   65,554   66,261   65,246   66,422 
Diluted 65,417   66,449   70,597   65,933   71,593 

Condensed Consolidated Balance Sheets
(in thousands)
 May 3, October 31,
 2020 2019
Current assets:   
Cash and cash equivalents$237,790 $206,530
Accounts receivable 135,035  134,454
Inventories 56,968  48,155
Other current assets 42,478  38,388
Total current assets 472,271  427,527
Property, plant and equipment, net 604,545  632,441
Intangible assets, net 5,690  7,870
Other assets 51,382  50,827
Total assets$1,133,888 $1,118,665
Liabilities and Equity   
Current liabilities:   
Debt$17,671 $10,873
Accounts payable and accrued liabilities 135,701  141,081
Total current liabilities 153,372  151,954
Long-term debt 35,783  41,887
Other liabilities 23,075  13,732
Photronics, Inc. shareholders' equity 769,191  769,892
Noncontrolling interests 152,467  141,200
Total equity 921,658  911,092
Total liabilities and equity$1,133,888 $1,118,665

Condensed Consolidated Statements of Cash Flows
(in thousands)
 Six Months Ended
 May 3,  April 28,
Cash flows from operating activities:   
Net income$18,900  $17,620 
Adjustments to reconcile net income to net cash   
provided by operating activities:   
Depreciation and amortization 47,896   38,515 
Share-based compensation 2,576   1,962 
Changes in operating assets, liabilities and other (8,049)  (60,384)
Net cash provided by (used in) operating activities 61,323   (2,287)
Cash flows from investing activities:   
Purchases of property, plant and equipment (30,127)  (140,436)
Government incentive 5,260   5,698 
Other (139)  (23)
Net cash used in investing activities (25,006)  (134,761)
Cash flows from financing activities:   
Proceeds from long-term debt 1,140   39,633 
Contribution from noncontrolling interest 7,600   29,394 
Purchase of treasury stock (16,894)  (10,696)
Repayments of long-term debt (389)  (61,220)
Proceeds from share-based arrangements 3,423   1,033 
Dividends paid to noncontrolling interests -   (26,102)
Other (251)  (45)
Net cash used in financing activities (5,371)  (28,003)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 475   2,843 
Net increase (decrease) in cash, cash equivalents, and restricted cash 31,421   (162,208)
Cash, cash equivalents, and restricted cash, beginning of period 209,291   331,989 
Cash, cash equivalents, and restricted cash, end of period$240,712  $169,781 

For Further Information:

R. Troy Dewar, CFA
Vice President, Investor Relations
(203) 740-5610


Source: Photronics, Inc.

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